Optimizing Fraud and Risk Lifecycle Management

In today’s digital world, ensuring security and a seamless customer experience is essential for business success. As online transactions increase, so do the challenges associated with fraud and risk.

In this article, we explore how to optimize fraud and risk lifecycle management using innovative solutions to protect customer accounts, offer a secure and smooth payment experience, recognize legitimate orders, and manage disputes efficiently.

Protecting Customer Accounts

The Challenge of Account Protection

In 2022, over 422 million people worldwide were victims of data breaches. In this context, it is crucial to safeguard customer accounts from unauthorized access and monitor new account creation to prevent fraud.

Technological Solutions for Account Protection

Account takeover protection solutions monitor account creation and updates to detect suspicious behavior before payment. Quickly identifying fraudulent activities helps prevent transaction processing costs, fraud analysis, and authorization expenses.

Offering a Secure and Seamless Payment Experience

Balancing Security and Ease

Customers want to pay quickly and easily while feeling confident that their payment details are secure. In 2023, the average cost of a data breach reached $4.45 million, underscoring the importance of protecting customer payment data.

Tokenization and Lifecycle Management

Tokenization solutions securely capture and store customer-sensitive information, replacing it with tokens. This enables fast and seamless payment experiences for returning customers, boosting revenue while mitigating the devastating impact of data breaches.

Recognizing Legitimate Orders

The Challenge of e-Commerce Fraud

Global e-commerce payment fraud losses reached $41 billion in 2022. Recognizing and confidently accepting legitimate orders is essential, even for first-time buyers or guest checkouts.

The Power of Artificial Intelligence

Artificial Intelligence (AI) can analyze massive data sets in real-time to detect suspicious patterns and identify fraudulent activity. High-quality, extensive datasets significantly improve AI models’ accuracy and predictive capabilities, reducing manual review costs and increasing revenue through automated processes.

Case Study: Sympla

Sympla, Brazil’s largest ticket sales and event management platform, faced challenges with fraud attempts in credit card transactions. By implementing the Decision Manager solution, they reduced the volume of transactions requiring manual review, improving the purchase experience.

With the Decision Manager’s “Replay” function, Sympla gained autonomy to make faster decisions, increasing the number of automatically approved purchases while maintaining control over suspicious orders.

Adding a Layer of Protection with Minimal Friction

Balancing Security and Customer Experience

Customers expect smooth payment experiences without the interruptions associated with cumbersome authentication methods. However, merchant losses due to online payment fraud are projected to exceed $362 billion globally between 2023 and 2028.

Advanced Authentication Technologies

The rise of biometric authentication technologies, such as fingerprint scanners and facial recognition, offers an added layer of security. By customizing security measures and reviewing only high-risk transactions flagged by PSD2 SCA, businesses can provide a seamless and user-friendly experience for other customers.

Case Study: Accor

Accor, Europe’s largest hotel company, sought to comply with PSD2 SCA requirements without compromising a smooth payment experience. By implementing Decision Manager and Payer Authentication solutions, Accor identified out-of-scope transactions and requested exemptions, optimizing the checkout experience.

Driving Customer Loyalty

The Importance of Personalization

In 2022, 62% of surveyed consumers stated they would stop being loyal to a brand that does not offer personalized experiences. To foster customer loyalty, it is essential to provide tailored offers, a smooth shopping experience, and loyalty rewards.

Tokenization and Loyalty

A tokenization service linking payment tokens with loyalty programs allows customers to automatically earn points for every eligible purchase. Leveraging customer behavior data for personalized offers boosts loyalty while keeping payment data secure.

Managing Disputes Efficiently

The Cost of Friendly Fraud

Handling friendly fraud costs approximately $351 for every $100 in disputes. Customers expect to initiate disputes for unrecognized transactions, and resolving legitimate disputes quickly is essential while safeguarding against false claims, such as friendly fraud.

Dispute Management Solutions

Dispute management solutions help identify and resolve disputes promptly before they escalate to chargebacks, allowing efficient and accurate issue handling.

Conclusion

Optimizing fraud and risk lifecycle management is vital for business success in the digital world. By adopting innovative solutions to protect customer accounts, ensure secure and smooth payment experiences, recognize legitimate orders, drive customer loyalty, and manage disputes efficiently, businesses can boost revenue, reduce fraud costs, and deliver frictionless experiences to their customers.

Corebiz connects you with strategic partners like Visa, whose expertise in security and advanced technology helps identify and accept legitimate orders with full security, customizing fraud and security solutions to meet each e-commerce’s specific needs. Contact our team of experts to learn more.